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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.55 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.55 suggests that the company is not a manipulator.

TMO' s Beneish M-Score Range Over the Past 10 Years
Min: -3.15   Max: -0.38
Current: -2.55

-3.15
-0.38

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.38. The lowest was -3.15. And the median was -2.53.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.9578+0.528 * 0.942+0.404 * 0.9824+0.892 * 1.0594+0.115 * 0.9289
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 0.9647+4.679 * -0.0139-0.327 * 0.9434
=-2.55

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Sep15) TTM:Last Year (Sep14) TTM:
Accounts Receivable was $2,544 Mil.
Revenue was 4123.2 + 4270.9 + 3918.8 + 4492.8 = $16,806 Mil.
Gross Profit was 1883.3 + 1941.8 + 1822.5 + 2091.9 = $7,740 Mil.
Total Current Assets was $6,026 Mil.
Total Assets was $41,147 Mil.
Property, Plant and Equipment(Net PPE) was $2,392 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,692 Mil.
Selling, General & Admin. Expense(SGA) was $4,658 Mil.
Total Current Liabilities was $5,735 Mil.
Long-Term Debt was $10,278 Mil.
Net Income was 476.1 + 511.6 + 385.1 + 601.2 = $1,974 Mil.
Non Operating Income was -1.4 + 3 + -3.9 + 4.9 = $3 Mil.
Cash Flow from Operations was 743.9 + 764.9 + 80 + 953.7 = $2,543 Mil.
Accounts Receivable was $2,507 Mil.
Revenue was 4171.4 + 4321.9 + 3903.5 + 3466.9 = $15,864 Mil.
Gross Profit was 1933.6 + 1846.5 + 1620 + 1481.7 = $6,882 Mil.
Total Current Assets was $5,720 Mil.
Total Assets was $42,691 Mil.
Property, Plant and Equipment(Net PPE) was $2,406 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,505 Mil.
Selling, General & Admin. Expense(SGA) was $4,558 Mil.
Total Current Liabilities was $6,222 Mil.
Long-Term Debt was $11,389 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2543.9 / 16805.7) / (2507.1 / 15863.7)
=0.15137126 / 0.15804005
=0.9578

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1941.8 / 15863.7) / (1883.3 / 16805.7)
=0.433808 / 0.46052827
=0.942

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (6025.9 + 2392.2) / 41147.1) / (1 - (5719.9 + 2406.1) / 42690.8)
=0.7954145 / 0.80965454
=0.9824

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=16805.7 / 15863.7
=1.0594

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1505.4 / (1505.4 + 2406.1)) / (1692.4 / (1692.4 + 2392.2))
=0.38486514 / 0.41433678
=0.9289

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(4658.3 / 16805.7) / (4558.2 / 15863.7)
=0.27718572 / 0.28733524
=0.9647

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((10277.9 + 5735.1) / 41147.1) / ((11388.6 + 6222.1) / 42690.8)
=0.38916473 / 0.41251745
=0.9434

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1974 - 2.6 - 2542.5) / 41147.1
=-0.0139

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.55 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
DSRI 1.72650.4050.94640.990311.09440.94561.02840.98711.0242
GMI 1.09741.05950.97421.00640.97920.98020.97981.00220.95220.9197
AQI 1.2490.99820.95580.99371.01891.02381.00090.83381.24641.0147
SGI 1.442.57051.07710.9631.04561.09351.08231.04641.29021.0045
DEPI 1.89810.43010.97541.03251.04811.01810.95841.00460.88171.0042
SGAI 1.0120.89320.98061.02940.98411.03450.99790.98171.10110.7572
LVGI 0.68750.91340.90881.01291.02271.8861.0061.19181.04250.9196
TATA -0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214-0.0173-0.0201
M-score -1.12-1.77-2.56-2.70-2.54-2.67-2.62-2.64-2.28-2.52

Thermo Fisher Scientific Inc Quarterly Data

Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15
DSRI 1.01861.02841.29661.20091.04670.98710.76880.87350.95781.0242
GMI 1.00051.00221.00320.99620.97220.95220.92530.91520.9420.9574
AQI 0.94720.83381.04871.10261.12471.24641.00980.9790.98241.0147
SGI 1.0441.04641.09161.16491.23141.29021.22481.13231.05941.0045
DEPI 0.99531.00461.19781.07890.96230.88170.73420.82690.92891.0042
SGAI 0.98120.98171.03441.05651.08741.10111.04521.00480.96470.8927
LVGI 0.93571.19181.35511.28611.27171.04250.93990.94910.94340.9196
TATA -0.0211-0.0214-0.0058-0.0162-0.0177-0.0173-0.0208-0.0123-0.0139-0.0201
M-score -2.52-2.64-2.23-2.28-2.39-2.28-2.64-2.59-2.55-2.52
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